Section 8 Fair Market Rent (FMR) for ZIP 51631 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

When evaluating whether to invest in ZIP code 51631 for Section 8 properties, follow this decision tree:

• Does the Fair Market Rent (FMR) of $1,080 cover the debt service on a property valued at $203,871?
  • If yes, proceed to the next question.
  • If no, purchasing in this area is not advisable due to insufficient rental income to cover expenses.
• Is the market rent of $856 above, at, or below the FMR?
  • If the market rent is above the FMR, consider the excess as additional potential income.
  • If the market rent is at or below the FMR, you can expect to collect the FMR amount for Section 8 tenants, but there's less room for non-Section 8 market rents.
• Are the 20.1% of renters combined with the unknown days on market (DOM) indicative of sufficient demand?
  • If the DOM is low, indicating quick turnover, then the 20.1% of renters is likely enough to sustain a Section 8 portfolio.
  • If the DOM is high, suggesting slower turnover, the demand might be too low to justify investment despite the renter percentage.

Yes: If the FMR covers the debt service, the market rent is close to or exceeds the FMR, and the DOM indicates healthy demand, then investing in ZIP 51631 for Section 8 properties is a good decision. The $1,080 FMR can clear the debt service on a $203,871 property, and the $856 market rent is only slightly below, which means you can still attract non-Section 8 tenants willing to pay market rates. Additionally, the 20.1% of renters suggests a stable tenant pool, although the lack of DOM data requires further investigation.

No: If any of these conditions fail, particularly if the FMR does not cover debt service or if the DOM is high, then purchasing in ZIP 51631 is not recommended. Insufficient rental income would make it difficult to manage expenses, while a high DOM could indicate that the local demand for rental housing is not strong enough to support a Section 8 portfolio.

It Depends: If the FMR and market rent are closely aligned, and the DOM data is inconclusive, the decision hinges on additional factors such as property management costs, local competition, and the specific needs of your portfolio. A thorough analysis of these elements is required before making an informed decision.

Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).

About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.